It’s nearly impossible these days to follow the news without coming across a headline about how the supply chain is in upheaval not just in the U.S., but around the world.
“Global Supply-Chain Problems Escalate, Threatening Economic Recovery” (Wall Street Journal)
“Stock Investors Fret Supply Chain Woes Could Knock Earnings” (Bloomberg News)
“VC money pouring into supply chain tech solutions” (CNBC)
A recent article in The Atlantic, headlined “America is Running Out of Everything”, was inspired by the writer’s hours-long trek to three different stores to fulfill a simple shopping list. In researching what was driving the empty shelves and product shortages he encountered, one of the discoveries the writer made is that high demand and limited supply are causing prices to skyrocket. He cites as an example the cost of a shipping container: Pre-pandemic, a container holding roughly 35,000 books cost $2,500; today, that price is tenfold.
It’s enough to make one wonder if – not when – things will ever return to normal, and begs the question, what exactly is the new normal when it comes to supply chain? We don’t know the answer … yet. But we’re hopeful we’ll soon see signs of improvements, and plans for building a better tomorrow.
Back in February, President Biden signed an executive order that hints at hope for the future. Its intent is straightforward: create supply chains that are more resilient and secure for critical and essential goods. We need to think back only to last year to see how supply chain disruptions impacted health care workers who couldn’t get their hands on PPE at the beginning of the COVID pandemic.
And, while the stalled supply chain has certainly disrupted the way we do business, it has inspired about 1,500 North American companies to seek out domestic production, according to the 2021 Thomas State of North American Manufacturing Report. Not only that, but 83 percent of manufacturers said they were “likely” to “extremely likely” to reshore. The year before, that number was at 54 percent.
Let’s imagine for a moment that, that happens. According to the Thomas report, “If four in five U.S. manufacturers bring on one new domestic single-contract supplier, it will inject $443 billion into the U.S. economy”. $443,000,000. That’s a lot of zeros, and to us, it suggests great potential for the future.
At Commercial Funding Partners, we have a front-seat view of what will happen in the coming months and years, as we continue our three-decade tradition of helping small and mid-size businesses like yours secure the funding you need to grow. We are curious to see how many of our clients will turn to domestic suppliers, or perhaps even venture into that business line themselves. And we remain committed to continuing our partnership with each and every one of you, and serving as your trusted advisor, as we navigate the new normal.